Huge San Benito County solar farm proposal has its day in court

In the remote cow pastures south of Hollister, a Cupertino company is proposing building a massive solar energy farm that would be roughly 30 times larger than the largest solar farm now operating in the United States. (Karen T. Borchers/Mercury News)

A proposal to build one of the world's largest solar farms south of Silicon Valley had its day in court Monday as a long-simmering battle between the Bay Area investors supporting the project and environmentalists who say it will harm wildlife finally came before a judge.

At the center of the debate is a $1.8 billion, 399-megawatt solar farm proposed for Panoche Valley, an arid expanse of rangeland and barbed wire 50 miles southeast of Hollister. Last year, the San Benito County Board of Supervisors voted to approve the project, saying it would make rustic San Benito County -- known more for its cattle and condors than computer chips -- a national center of clean energy.

But the Santa Clara Valley Audubon Society, the Sierra Club and a group of local residents known as Save Panoche Valley sued to block it, claiming the 4 million solar panels that would be constructed across the roughly 3,200 acres west of Interstate-5 would harm endangered species and disrupt the rural character of the area.

"Solar obviously is very critical. No one disputes the necessity for solar energy," said Rose Zoia of Santa Rosa, the attorney representing the three environmental groups, during oral arguments. "The issue here is that it is improper on this site."

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During the one-day hearing Monday in San Benito County Superior Court before Judge Robert O'Farrell, Zoia argued that the county made three key errors when it approved the project. First, it failed to fully protect several endangered species on the site, such as the blunt-nosed leopard lizard, the San Joaquin kit fox and the giant kangaroo rat.

Second, she said, the county violated state law by not thoroughly considering alternatives to the project in its environmental study, such as a 30,000-acre landscape of fallow farmland 50 miles away in Kings and Fresno counties.

That property, in the Westlands Water District, is damaged by selenium that leached from the soil from years of irrigation but still would be suitable for the photovoltaic panels.

And finally, the county violated California's primary law that protects farmland, the Williamson Act, when it allowed the landowners who had optioned property for the solar farm to cancel their Williamson Act contracts early, Zoia said. Farmers and ranchers typically sign 10-year contracts promising not to develop their lands, in exchange for tax breaks.

Attorneys for the developer worked to systematically rebut the claims, arguing that the environmental groups were nitpicking a 2,100-page environmental impact report that cost $800,000 and took more than a year to prepare.

"This is a typical kitchen-sink attack with the hope that a flaw may be found," said Jason Retterer of Salinas, an attorney for the developers.

Retterer said the other proposed site was not practical because the developer, Solargen, controlled none of the land and it would take years and millions of dollars to start the project over. He noted that the developers have agreed to set aside 23,000 acres adjacent to the solar farm for wildlife and cattle in permanent protection. And he said the environmental groups are overstating the ecological value of Panoche Valley.

"It's a windblown moonscape with sporadic cattle grazing," he said.

A decision from Judge O'Farrell is expected this fall.

The case is symbolic of a recent trend across California and other parts of the nation. As concerns over global warming have grown and with it, government and private funding for huge solar and wind projects, the main opponents have often been environmental groups. The issue has split the environmental movement. Some conservationists argue that they need to change their approach while others stick to the lawsuits they have traditionally used to block logging, mining and development.

Last month, for example, California Gov. Jerry Brown filed a brief asking a federal court to deny a request by an environmental group seeking an injunction to stop a $2.2 billion solar power project in the Mojave Desert. The Western Watersheds Project wants to stop construction of the 370-megawatt Ivanpah project because of desert tortoises at the site.

Brown signed a law in April requiring California's utilities to provide 33 percent of their electricity from renewable sources by 2020.

"California has a strong and demonstrated interest in increasing its renewable energy and decreasing greenhouse gas emissions," Brown's brief said. "The court should take these interests into account, and deny Western Watersheds' request for a preliminary injunction on the grounds that an injunction is not in the public interest."

Meanwhile, ownership of the San Benito County project has changed hands.

The project was conceived by Solargen, a small Cupertino company run by Michael Peterson, a former Goldman Sachs vice president. But Solargen, which had never built a large solar project, had difficulty raising funding and securing an agreement with PG&E to purchase power from the site.

In April, a company called PV2 Energy bought Solargen and 85 percent of the project. PV2 is controlled by Industry Capital, a San Francisco investment firm that manages $1.1 billion. Solargen changed its name to Nevo Energy, which retained 15 percent ownership.

Peterson said Monday he still hopes to break ground by 2013.

"Lawsuits are part of the process in California," he said. "We're still very optimistic."